Samsung SDI Co. announced on Tuesday it will invest about 400 billion won ($358 million) to build an electric vehicle (EV) battery plant in Hungary that is expected to be used as a European hub to supply EV batteries across the region. The new factor will enable the Korean battery maker to churn out batteries enough to be used in 140,000 EVs per year globally.

Samsung SDI said it aims to ready the new factory for commercial operation by the second half of 2018, which will initially produce batteries for 50,000 EVs per year. The new plant to be located in Göd, some 25 kilometers north of Budapest, will sit on a 330,000 square meter site that was used as its plant to manufacture plasma display panels (PDP). It stopped producing PDPs after major TV producers such as its sister company Samsung Electronics Co. discontinued PDP TV production. Samsung SDI expects it will be able to save construction time and budget by utilizing the old display factory’s infrastructure.

The new plant is also expected to bring a new momentum to Samsung SDI in its efforts to boost its global production capacity for EV batteries. Total output will rise to 140,000 units per year including batteries to build 60,000 EV units from Ulsan and 30,000 units from Xian. Samsung SDI is projected to continue expanding its production capacity until 2020.

As Hungary is home to the production of Europe’s major finished carmakers such as Mercedes-Benz, BMW and Volkswagen, the new factory is also expected to allow Samsung SDI to save logistics costs and respond to customer needs more promptly.

As its battery pack making operation SDIBS is in Austria, the company will likely create synergy between the new battery cell factory in Hungary and SDIBS. Once the new factory is completed, battery cells to be produced in Hungary will be transported to Austria for assembly with battery packs in its battery pack plant, enabling the Korean energy solution provider to complete its EV battery production in Europe.

By Song Sung-hoon

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